ERP Go Live and Supply Chain Synchronization

31st May 2012

One of the important roles supply chain plays at ERP go live is making certain that all of the internal work orders, the manufacturing production schedule, the work in process inventory, the batch information, the lot information, all interplant shipments, all of the raw material inventory, and all of the sales goods inventory are arranged exactly the same in ERP as they were in legacy when legacy was shut down. The objective is to be able to start up in a manner in which the production schedule is correct, and everyone understands exactly what the production schedule is. In other words, information is flowing normally. This synchronization should be rehearsed as if a real ERP go-live was occurring for integration test 3, and repeated again before go-live.

This is not easy work. When you get ready to practice in earnest, with real data, you will find that 20% of your inventory has a problem (obsolescence, missing data, unidentified materials, unresolved quality problems, etc.) and you will have to decide whether to load those problems into ERP, or resolve them before go-live. You will find that 30% of your internal work orders are not closed out properly or are hopelessly outdated, and that will force the decision to try to straighten them out, or simply ignore them and load work orders manually at go-live. You will find that manufacturing has almost a full day’s worth of inventory sitting on the shop floor in limbo, waiting for quality, or engineering, or sales to make a decision. And you will find that no one is exactly sure about how to create the new production schedule and distribute it, when all of the material numbers are changing.

Supply Chain Group Sets the Tone

The reason this synchronization practice and forethought is necessary is that at ERP go-live, supply chain must be the leadership group in the midst of all of the unfamiliarity that says, “Everything is fine, and this is what you need to do.” On day one of ERP go-live, almost every problem is labeled a supply chain problem, and if supply chain does not have its act totally together, and know what it is are doing, it will reinforce the notion that the system is not working. If people sense uncertainty in the ERP supply chain group, then the general sense of nervousness that everyone is feeling will escalate to mild panic, and a vicious cycle develops. Alternatively, if the supply chain is calm and confident, then that confidence spreads throughout the organization and successes begin building on each other in a virtuous cycle.

Take synchronization and the role of supply chain at ERP go-live seriously. Assign good talent specific responsibility and hold them accountable. Practice go-live as often as practical, because you will learn something important every time. And remember that at go-live, ERP knows absolutely nothing that you haven’t told it.